Goodwell Investments launches new EUR50m fund to support high-growth African SMEs

Goodwell Investments, an impact investment firm, has launched Goodwell V. Following on from predecessor funds, Goodwell V aims to channel capital from private investors, family offices and foundations to fast-growing, scalable small and medium-sized companies.

Goodwell V is the cornerstone feeder for a new institutional fund that the company plans to launch in the second half of this year. The firm’s local teams in Nigeria, Kenya and South Africa have made more than 20 investments across Africa over the last five years, successfully balancing substantial social impact with delivering a market rate of return to investors.   

Goodwell V will build a new portfolio of companies across various sectors in Africa: at least a third will be invested in financial inclusion, a quarter in agriculture, and the remainder in mobility and other impact sectors such as education and healthcare. The fund will also allocate follow-on funding to existing portfolio companies, such as Copia, MFS Africa, Good Nature Agro, Tomato Jos, and Nomanini.   

Over the next decade, Africa is expected to continue to be home to some of the fastest growing economies in the world. A growing youth population, together with rapid urbanization and improving business environments across the continent, are contributing to an increase in purchasing power and rising household consumption predicted to reach USD2.5 trillion by 2030.

A rising generation of passionate entrepreneurs has emerged, building on these foundations and buoyed by the opportunity to build scalable and innovative business models that solve their communities’ social and development challenges. While investment in African startups grew from USD400 million in 2015 to USD2 billion in 2019, just 2 per cent of global private equity investment reaches the continent. The capital committed to early and growth-stage businesses in Africa is doubling every year but still merely scratches the surface of the growth potential. To contribute to inclusive growth and provide access to essential goods and services to hundreds of millions of un(der)served consumers, investment needs to happen at scale.   

Goodwell Director of Communications Nico Blaauw says: “We are convinced that businesses led by local entrepreneurs are the key drivers of inclusive growth in Africa. Therefore, the path to inclusive growth in Africa is to support early-stage companies who are best positioned to solve critical challenges in their communities. Our portfolio companies are showing average revenue growth of over 50 per cent per annum. They have been able to withstand the perils of the pandemic by doing what they do best: providing access to essential products and services like food, transport, healthcare, and financial services. We are excited to continue the journey.”  

Tayo Oviosu, Founder and CEO of Goodwell Investments’ portfolio company, Paga, notes: “When we met Goodwell, in 2011, we were still at a very early stage and had no formal institutional investors on board. The first investment by Goodwell enabled us to kick-start our journey, and the second one in 2015 further accelerated our growth. In 2020 we passed the mark for 17 million users, whom we serve through a network of over 35,000 agents. We see the opportunity to connect every adult in Nigeria to financial services, and we are delighted Goodwell see things the same way!”   
 
Having provided over EUR 150 million in funding to 35 inclusive businesses across Asia and Africa over the past 15 years, Goodwell Investments has a long-standing commitment to impact investment while reporting top-quartile returns at the same time.